Xiaomi has been cleared for an initial public offering in Hong Kong by the local stock exchange, Bloomberg reports, citing sources familiar with the development. One of the largest technology floats in the history of trading is believed to be targeting a valuation of up to $80 billion, with Xiaomi being expected to raise some $10 billion in cash with the move. The IPO itself will also be the first Hong Kong Stock Exchange listing with weighted voting rights, meaning Xiaomi will be issuing non-equal shares, presumably so that founder and Chief Executive Officer Lei Jun maintains control of the company. While the listing structure in question isn’t unconventional in the West, Hong Kong’s exchange only allowed it through a rulebook change two months ago.
Xiaomi’s listing approval came following a Thursday hearing, with insiders claiming the company is already seeking to test investor demand which is likely to be significant. While some industry analysts remain skeptical about its overall prospects, the firm is still the world’s fourth-largest mobile manufacturer and is presently challenging Samsung for the title of the leading handset vendor in India, the fastest-growing smartphone market on the planet. The Hong Kong listing is expected to take place in the first half of July, with Xiaomi hence likely planning an investor roadshow in the coming days.
Xiaomi’s IPO will be the largest tech float since Alibaba listed itself in 2014 at a nearly double valuation. Besides debuting in Hong Kong, the OEM will reportedly be issuing depositary receipts in mainland China, becoming the first company int he Far Eastern country to do so. Goldman Sachs, Morgan Stanley, and Citic Securities will be underwriting the Hong Kong IPO, with a combination of Chinese and foreign banks being tasked with managing the sale of shares. A dual-listing strategy is seen as a relatively safe bet with higher chances of ensuring Xiaomi’s fundraising target than an individual bourse float.